Hours after a proposed merger between Reliance Industries Ltd.’s media entities with Zee Leisure Enterprises Ltd. was revealed, the Mukesh Ambani-controlled group mentioned the transaction was derailed by variations between the broadcaster’s Managing Director Punit Goenka and its single-largest shareholder Invesco Creating Markets Fund.
Reliance mentioned Invesco had assisted it in arranging discussions with Goenka between February and March this 12 months. “We had made a broad proposal for merger of our media properties with Zee at honest valuations of Zee and all our properties,” Reliance Industries mentioned in a press release. “The valuations of Zee and our properties have been arrived at based mostly on the identical parameters.”
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Proposal included continuation of Goenka as managing director and subject of worker inventory choices to administration.
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Goenka and Invesco, Reliance mentioned, differed on the requirement of Zee group’s founding household rising stake by subscribing to preferential warrants.
“At Reliance, we respect all founders and have by no means resorted to any hostile transactions,” the corporate mentioned. “So, we did not proceed additional.”
On Wednesday morning, Invesco Creating Markets Fund issued a press release saying it was facilitating the transaction between Reliance entities and Zee. That got here in response to Goenka’s letter to the Zee board, disclosed on Oct. 12, saying that Invesco had approached him with a deal to merge Zee with a big Indian group, with out naming the entity.
Invesco, together with affiliate OFI International China Fund, owns 17.88% of Zee Leisure. It is at present locked in a authorized dispute to oust Goenka and appoint six new impartial administrators.